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Greens leader Adam Bandt announcing he had struck a deal with the government to pass the climate legislation.Credit:Alex Ellinghausen

The safeguard mechanism is due to kick in on July 1,but the minor party’s support was needed in the Senate to legislate the bill after the opposition ruled out supporting it.

The safeguard mechanism will impose binding caps on Australia’s 215 biggest polluters – including coal mines,gas plants,smelters and manufacturers – to force them to reduce their carbon footprint by a cumulative 205 million tonnes by the end of the decade. They can do this by buying carbon credits generated by projects such as tree planting or they can switch old fossil fuel technology to cleaner systems powered by renewable energy.

Before the Greens’ amendment,the scheme only forced net emissions to fall – meaning the big polluters could have increased the volume of greenhouse gases released into the atmosphere and still comply with the rules by buying more carbon offset credits.

Under Bandt’s deal,there is a hard cap on emissions,with Bowen committing to amend his bill with a clause to ensure there is a real-world reduction to the aggregate emissions from the 215 large polluters captured by the mechanism.

“Coal and gas pollution was set to soar under Labor’s safeguard,” Bandt said. “This puts a limit on coal and gas expansion in Australia. Pollution will now go down,not up,as it was set to under Labor.”

While the Greens’ changes are substantial,they don’t go as far as Bandt’s prior demand that the government veto all new coal and gas projects.

Bowen agreed to a new rule that forces any new gas wells for export projects to be net zero emissions as soon they start operation,either by buying offsets or with carbon capture and storage.

Bandt said his deal with Bowen would “derail the business case” of the controversial Beetaloo Basin gas field in the Northern Territory.

The Greens leader said although his negotiations with the government had been in good faith,Labor’s policies on climate change did not go far enough.

“It’s become readily apparent that we are dealing here in this parliament with a government that is still captured by the coal and gas corporations,” Bandt said.

Bowen said delivering the Greens’ amendments did not require him to impose any new restrictions that were not in line with government policy and Labor’s election mandate.

“The things that I’m announcing today meet both of those tests and it’s very clear from Mr Bandt’s press conference that there are things that he asked for that we haven’t agreed to because they weren’t in keeping with those two tests,” he said.

The safeguard mechanism requires industrial emitters that generate more than 100,000 tonnes of greenhouse gas a year to cut emissions by at least 4.9 per cent a year,or 30 per cent by the end of the decade. This is expected to deliver about one-third of the overall reductions needed to achieve Labor’s climate target to reduce Australia’s greenhouse budget43 per cent by 2030.

Bowen has said the safeguard mechanism will not prevent development of new coal or gas projects even with Bandt’s new deal,as the rate of emissions reduction exceeds the cuts needed to achieve the goal,leaving a buffer of about 17 million tonnes,which could leave room for the pollution generated by a new project. Capacity for new emissions under the scheme will also be opened up when industrial polluters cut emissions by switching to cleaner technology.

Prime Minister Anthony Albanese invoked Kevin Rudd’s failed bid in 2009 to introduce a carbon emissions scheme,which was blocked by then-Greens leader Bob Brown,as he celebrated the deal brokered with Bandt.

“We need to act on climate change. We can’t afford to continue to engage in conflict in this place in order to try to get the perfect outcome,” Albanese said.

Two former Greens leaders,Bob Brown andChristine Milne,have pushed hard for Bandt to hold the line against new coal and gas,even if it meant rejecting the bill,butothers warned against a repeat of the clash that destroyed a Labor attempt to put a price on carbon in 2009.

Bowen last week said Australia’s emissions budget would blow out by 20 per cent if the safeguard mechanism was not reformed.

Cut through the noise of federal politics with news,views and expert analysis from Jacqueline Maley.Subscribers can sign up to our weekly Inside Politics newsletter here.

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